Question 9

[fiwipie]

Would an “outside in” or an “inside out” approach to delivery be more effective and why?

Are there other approaches that should be considered?

[opticalgirl]

OK, I'll kick off this discussion.  I think outside in would be best.

We were told that the Next Generation Fund was set up to provide for the so-called "final third".  Apparently 80 percent of the UK has access to ADSL2+ technology in the telephone exchange.  Simple maths says that the remaining 20 percent that only have older, slower technologies must be part of the final third.

The other 13 and bit percent would be comprised of homes connected to exchanges where the average line length is too long to support a ADSL service of 2Mbps, which is somewhere in the region of 2km.  I guess data are available to work this out - could be a bit of a bummer for borderline cases, but you've got to draw the line somewhere.

Another way to look at this would be to support projects in Market 1 - exchanges where BT is the only operator with equipment there.  This would help to preserve the existing market for DSL LLU, in which many operators have heavily invested, so would create the least market distortion.  I reckon Openreach would be unhappy, as it might think it's being unfairly targeted over other operators, but then it's likely to be unhappy about extra competition whereever it occurs.

[cyberdoyle]

Not sure about your stats, when openretch say 80% have access to adsl2+ do they mean population or area, because there is a big difference...
60% of the population live in around 10% of the land mass if I remember the data from the CBN survey...
but I might be wrong. Does anyone have the correct figures?

[fiwipie]

I must admit I take a hardball approach to LLU

The analogy that springs to mind is video rental shops that went with betamax rather than VHS

The point being that protecting investment in LLU should not come at the expense of holding back large swathes of the UK with less than world class FttH

Let's guard against the make do and mend mentality!

I can see roles for both approaches actually - outside in from deeply rural to market towns and inside out from cities to hinterland, both converging in the market 1 areas probably

certainly the rural notspots and crapspots for current generation broadband are crying out for a decent service now and arguably derive a greater benefit vis a vis urban areas due to relative lack of availability of nearby services and amenities.

OK, I'll kick off this discussion.  I think outside in would be best.

We were told that the Next Generation Fund was set up to provide for the so-called "final third".  Apparently 80 percent of the UK has access to ADSL2+ technology in the telephone exchange.  Simple maths says that the remaining 20 percent that only have older, slower technologies must be part of the final third.

The other 13 and bit percent would be comprised of homes connected to exchanges where the average line length is too long to support a ADSL service of 2Mbps, which is somewhere in the region of 2km.  I guess data are available to work this out - could be a bit of a bummer for borderline cases, but you've got to draw the line somewhere.

Another way to look at this would be to support projects in Market 1 - exchanges where BT is the only operator with equipment there.  This would help to preserve the existing market for DSL LLU, in which many operators have heavily invested, so would create the least market distortion.  I reckon Openreach would be unhappy, as it might think it's being unfairly targeted over other operators, but then it's likely to be unhappy about extra competition whereever it occurs.

[opticalgirl]

cyberdoyle, 80% is definitely population.  The majority of people live in urban areas, that's why the figure is so high.

Britain needs to bring broadband to 100% of the people, not 100% of the area.

[opticalgirl]

fibrestream, in my view the fund should invest in the areas least likely to recieve decent broadband through market forces. You can see which those are already - I made a few suggestions in my original post. 

I guess this assumes that the roll out of next-gen broadband will follow the same pattern as the roll out of first gen broadband - I think that's probably a reasonable assumption.

It occurs to me that if you clearly define what constitutes the "final third", then maybe the whole question of "outside in" versus "inside out" goes away.  If you're in the "final third" then you're eligible, full stop.

It's so nice not to be talking to myself any more- thanks for joining in the discussion everyone!

[fiwipie]

Likewise OpticalGirl good to talk, as some company used to advertise, now who were they....

Something that has also been put into the mix lately is Social Inclusion, the Martha Lane Fox mission you might say.

Rather than the Final Third being considered as a geographic community of interest, there is also a push from some quarters to create open access FttH networks for example that promote social inclusion in the First 2 Thirds areas as well.

I mention this as potential competition for any funding that might otherwise be directed to the Final Third - not as exactly a zero sum game calculation and rather recognising that public money is scarce (at least for non bank bail-out activities!)

I think also that we need to be careful about defining the market in terms of supply-side players and not excluding the emergence of FttH upstarts unencumbered by the baggage of incumbency - otherwise we risk distorting the market with the very taxpayer funding we are seeking to foster.

A closing thought re the Final Third - an open minded commercial analysis of the socio-demographics concerned might lead to considering the opportunity as First Third instead.... rural folks have less ready access to services and amenities than their city cousins, this makes connectivity more valuable arguably  - and value drives the business case.

fibrestream, in my view the fund should invest in the areas least likely to recieve decent broadband through market forces. You can see which those are already - I made a few suggestions in my original post. 

I guess this assumes that the roll out of next-gen broadband will follow the same pattern as the roll out of first gen broadband - I think that's probably a reasonable assumption.

It occurs to me that if you clearly define what constitutes the "final third", then maybe the whole question of "outside in" versus "inside out" goes away.  If you're in the "final third" then you're eligible, full stop.

It's so nice not to be talking to myself any more- thanks for joining in the discussion everyone!

[opticalgirl]

I think it would be a bad idea to mix the two ideas - broadband availability and digital inclusion.

Digital inclusion has different causes and possible solutions, price is only one factor.

Broadband in the urban areas that would constitute your "first two thirds" looks very cheap from where I'm sitting.  You can get it free with your TV subscription (more people on low incomes have pay TV), or with your mobile phone contract (I think), and even if you can't get it free, you can get it for as little as £5.99 per month - that's not much more than the cost of a packet of fags, isn't it? 

In the "final third" area, you have to pay at least double that for the same service.  Also, if you're outside the area of the LLU providers you can't get access to most of the great telephone/broadband/TV deals that would bring costs down further.

The aim should be to bring costs down for everyone, not just for the least well off.

There's a large group of people somewhere between the 10% most socially excluded and the really well off, who deserve a better deal on broadband too.

(Oops, might have struck a nerve there)